FTX and IRS reach settlement for approximately $885M

FTX debtors will pay the IRS $200M, with an outstanding lower priority claim of $685M

article-image

Kiran Jyothi VP/Shutterstock and Adobe modified by Blockworks

share

The FTX estate and the Internal Revenue Service proposed a settlement that would see the bankrupt exchange’s estate pay the government nearly $1 billion. 

The sum, which totals $885 million, is a far cry from the $24 billion originally sought by the IRS. 

As part of the proposed plan, the debtors will pay the IRS $200 million within 60 days of confirmation. The other $685 million will be paid “to the extent of funds available in accordance with the settlement.”

Meaning that the claim is on the lower priority list, and other claims will be paid out first. 

There’ll be a hearing on the motion held on June 25 before Judge John Dorsey, the judge overseeing the bankruptcy proceedings. 

The FTX debtors pushed back against the $24 billion claim by the government tax agency last December, warning that FTX — while operational — “never earned anything anywhere near amounts that could support the IRS claims for $24 billion in taxes.”

Read more: FTX bankruptcy almost across the finish line

And that number was actually cut in half by the agency itself, which originally alleged that it was owed nearly $44 billion in taxes. 

The proposed settlement clears yet another hurdle in FTX’s path to winding down its bankruptcy. 

Later this month, a hearing will be held to cover the estate’s proposed reorganization plan. 

The estate announced in early May that it cobbled together between $14.5 and $16 billion to pay back creditors. But the plan has drawn mixed reviews from critics.

Some creditors are unhappy that their claims will only be paid out according to November 2022 prices. An aspect of the plan that was challenged at the beginning of the year, though Judge Dorsey said that the code is “very clear.”


Get the news in your inbox. Explore Blockworks newsletters:

Tags

Decoding crypto and the markets. Daily, with Byron Gilliam.

Upcoming Events

Old Billingsgate

Mon - Wed, October 13 - 15, 2025

Blockworks’ Digital Asset Summit (DAS) will feature conversations between the builders, allocators, and legislators who will shape the trajectory of the digital asset ecosystem in the US and abroad.

recent research

Research Report Templates.jpg

Research

Figure, founded by former SoFi CEO Mike Cagney, has emerged as a leader in onchain RWAs, with ~$17.5B publicly tokenized. The platform’s ecosystem volume is growing ~40% YoY as it expands beyond HELOCs into student loans, DSCR loans, unsecured loans, bankruptcy claims, and more. Operationally, Figure cuts average loan production cost by ~93% and compresses median funding time from ~42 days to ~10, creating a durable speed-and-cost advantage.

article-image

The Ethereum co-founder suggested LINEA holders would be eligible for other airdrops in cryptic tweet

article-image

The layer-2’s biggest release yet brings benefits — but a post-upgrade outage caused a chain reorg

article-image

Crypto is shifting into risk-on mode — pump.fun dominates meme activity, while Lido leans on treasury maneuvers

article-image

If the president breaks the Fed, he’ll own the budget problems

article-image

Combining Franklin Templeton’s tokenization expertise with Binance’s trading infrastructure could speed crypto adoption, companies say

article-image

The firm’s upcoming filing comes as competition heats up over the USDH stablecoin